Michael Mariotte / NIRS & Matthew L. Wald / The New York Times – 2010-10-13 17:20:11
New Reactor Stopped and ‘Nuclear Renaissance’ Sputters. So Industry Pressures Congress to Make it Even Easier to Get Taxpayer Money.
ACT NOW to Prevent New Nuke Subsidies during Lame Duck Session — and Join the Virtual March on Washington!
Michael Mariotte / Nuclear Information Research Service
(October 12, 2010) — This is a huge victory: Over the weekend, Constellation Energy announced it is pulling out of the proposed Calvert Cliffs-3 reactor project in Maryland, which effectively ends this new reactor.
NIRS has spent more than three years fighting this reactor tooth and nail. We’ve intervened twice in Maryland Public Service Commission proceedings. We’re the lead intervenor in NRC licensing proceedings for Calvert Cliffs — and our contention against foreign ownership in this project (it’s dominated by the French government through Electricite de France and Areva) has proven a major stumbling block. And with all our allies in the Chesapeake Safe Energy Coalition we’ve been in the streets, the media and the public arena demanding an end to this boondoggle.
And, on Saturday, we won!
Please act now to protect this victory at Calvert Cliffs, and to stop any more taxpayer money being wasted on new reactors, by writing your Senators and Representative here. Here’s why:
In its statement announcing it is shelving Calvert Cliffs-3, Constellation claimed it was doing so because the terms of a $7.5 Billion loan the Obama administration was ready to give the company were too “onerous.”
For this $10-billion-plus reactor (the French government was going to chip in another $2.9 Billion), the administration wanted the utility to either put up $880 million of its own money (called a credit subsidy cost, kind of like the down payment you would have to put on a mortgage), or $300 million and guarantee sales of only 75% of the reactor’s electricity.
This was too risky and “onerous” for Constellation Energy. In other words, they admitted they wanted taxpayers to take ALL the risk of this project.
In fact, that was just a smokescreen. Constellation would have cancelled Calvert Cliffs even if there had been no credit subsidy cost at all — the economics of the project simply didn’t make sense. And it’s telling that Constellation shares skyrocketed up in the first day of trading after their announcement: investors were delighted Constellation got out of this dumb deal.
But the nuclear industry is already working in Congress to not only get more taxpayer money for nuclear loans, but to force the administration to make taxpayers take all of the risk for those loans. And they’re hoping they can sneak such legislation through in the lame duck session that begins in mid-November.
All year, with your help, we have blocked the industry from receiving any new funds for nuclear loans. Now we have to act again.
Please protect this victory at Calvert Cliffs, act to stop any more taxpayer money being wasted on new reactors and to make sure taxpayers don’t have to take all the risk of new reactor construction, by writing your Senators and Representative here.
Here is a link to this action that you can forward to your friends and colleagues who will want to take action. The industry lobbying effort will be strong and well-financed, and it will take as many of us as possible to counter them.
We are, of course, walking on air that our long battle over Calvert Cliffs was successful (as, so far, has been our campaign to stop new taxpayer subsidies for new nukes). But these successes are only possible with your help and support! NIRS, 6930 Carroll Avenue, #340, Takoma Park, MD 20912.
[See below for a related New York Times article.]
Virtual March on Washington
Have you joined the Virtual March on Washington yet? Stand up and be counted! It’s easy and it’s fun. An outgrown of the actions of International Radioactive Waste Action Day, the virtual march will keep building between now and April 26, 2011–the 25th anniversary of the Chernobyl catastrophe._
All you have to do to join is send in a photo of yourself to email@example.com. If you’d like to hold a sign (and we encourage that!), you can download and print a sign here, or make one of your own. You can also see a slideshow of the growing number of people who have joined in so far.
So send your pictures in today, and let’s get thousands of people to join in this Virtual March on Washington!
Michael Mariotte is Executive Director of theNuclear Information and Resource Service, NIRS, 6930 Carroll Avenue, #340, Takoma Park, MD 20912.
Fee Dispute Hinders Plan for Reactor
Matthew L. Wald / The New York Times
WASHINGTON (October 9, 2010) — Constellation Energy said on Saturday that it had reached an impasse in negotiations for a federal loan guarantee to build a proposed third nuclear reactor at its Calvert Cliffs site near Washington.
The decision would appear to kill the project unless Congress or the White House steps in. Constellation said in a letter to the Energy Department that the Office of Management and Budget was seeking a fee of $880 million on a guarantee of about $7.6 billion, which it said would doom the project, “or the economics of any nuclear project, for that matter.”
The fee is to compensate taxpayers for the risk of default. The company argues that because the plant’s model is being proven in Finland, France and China, and because it has a strong partner, ElectricitÃ© de France, the fee should be 1 to 2 percent.
The project had once been hailed as a cornerstone of a nuclear power renaissance.
In 2005, President George W. Bush spoke at Calvert Cliffs, the first presidential visit to a nuclear plant in 30 years. “It is time for this country to start building nuclear power plants again,” he said. The last successful groundbreaking for a nuclear reactor in the United States was in 1973.
The federal government authorized a loan guarantee program in 2005 intended to spur nuclear power development, and Congress agreed to finance it in 2007. So far, however, only one guarantee has been issued, for two new units at the Southern Company’s Vogtle plant, near Waynesboro, Ga.
Ground has been broken there, and also for two more reactors across the Savannah River in South Carolina, a project that is proceeding without loan guarantees. But a variety of utilities around the country have stepped back from plans to build reactors.
Constellation, which serves a large area of Maryland and owns generating plants nationwide, announced its decision Saturday after the impasse was reported by The Washington Post.
On Saturday, James L. Connaughton, executive vice president of Constellation and an environmental official in the Bush White House, stopped short of saying the project was dead. “We were in the middle of discussions,” he said.
The government had proposed a lower fee if Constellation agreed to buy three-quarters of the power and Constellation and EDF guaranteed completion of the plant, said Mr. Connaughton, but he said those conditions were too onerous.
The site in question is 40 miles south of the District of Columbia where Baltimore Gas & Electric, a predecessor to Constellation, finished two reactors in the 1970s. They remain in operation.
In a statement, EDF said it was “extremely disappointed and shocked to learn that Constellation has unilaterally decided to withdraw from the Calvert Cliffs 3 project.” It added, “We were at the finish line with the Department of Energy and were making significant progress.”
Constellation said EDF would have to decide whether to proceed alone, although by law it needs an American partner. The companies had hoped to build a series of identical reactors around the United States, with local partners.
A spokeswoman for the Energy Department said they were surprised by Constellation’s announcement.
Constellation had been hinting for weeks that it had reservations. In September, Mayo Shattuck, the company’s chief executive, speaking at a Chamber of Commerce luncheon in Washington, referred to the differences in economics between Calvert Cliffs and the Vogtle plant.
The Georgia plant, he said, falls under traditional regulations that pass the costs of construction on to power customers; Calvert Cliffs, he said, was in a “merchant” environment, where companies build at their own risk, and sell power at market rates.
Experts have pointed out that the current economic climate is not favorable to nuclear construction, in part because the price of natural gas is so low.
Congress has authorized loan guarantees of up to $18.5 billion for new reactors, with $8.3 billion now earmarked for Vogtle. President Obama has proposed an additional $36 billion. The sums are simply guarantees by the government to repay lenders if the builder cannot do so.
Their cost to the Treasury is unclear; if the reactors are built as planned and run profitably, the cost would be zero. In fact, the Treasury could make a profit on fees paid by the borrowers. While the negotiations are secret, Constellation has been complaining for months that the fee Treasury sought was too high.
Posted in accordance with Title 17, Section 107, US Code, for noncommercial, educational purposes.